First Ward One will begin renovating the Torco building this spring, work that will create a new base interior, add new utilities, and clean the exterior of the structure at 47 Commerce SW. The restoration is expected to take about six months to complete.
When it’s finished, the single-story structure will offer 10,000 square feet of leaseable space, and heated, underground parking for 20 cars.
“It’s a site that has great architectural karma,” said Peter Colovos, a member of First Ward One and a manager for the Prairie Real Estate Group of Chicago.
“If someone wants a great building with a nice image, this is it,” he added.
The Torco project, which is valued at $2 million, is the first in Grand Rapids for the Chicago-based development group.
Colovos said the renovation would be done with a single user in mind, but wasn’t certain whether that would be an office tenant, a retail user or a restaurant.
The Torco is in the Heartside Business District near the corner of Commerce and Weston, and is in the sector that has been primarily targeted as a future entertainment district.
“We’re not locked into a use yet. The initial work we’re going to do will clearly be more basic so it won’t lock us into a use. But it will be a single tenant-user building,” said Adam Orlov, a member of First Ward One and the Prairie Group.
“We’ve had lots of inquiries and we’ve had lots of people approach us with potential lease options, but we have just not executed any of those,” said Colovos.
But Orlov did say that they were close to choosing a contractor for the project.
“All the concept work and design work has been completed and we’re waiting now for some feedback from some contractors,” he said.
Cornerstone Architects is designing the renovation. Cornerstone President Tom Nemitz said the building is structurally solid. The Torco was initially designed to be four stories, but a downturn in the economy during construction resulted in it being limited to one floor and the underground level that became a parking garage.
“It’s built like a beast,” said Nemitz.
Besides being located in Heartside, the Torco is also within the Downtown Development Authority’s boundary, and board members gave First Ward One a property tax abatement under Public Act 196, which became law nearly four years ago.
“It’s a fairly new program that has never been used in the DDA area,” said Jay Fowler, DDA executive director.
PA146 is known as the Obsolete Property Act. The statue allows for a partial property tax abatement for buildings that meet the legal definition of being obsolete.
“The project has been held up against those standards and it has passed the mustard,” said DDA board member John Logie.
With approval, city, county and ITP taxes are abated for a dozen years — but the school-increment tax isn’t.
First Ward One will save about $10,750 annually in tax payments from the abatement, though it will still pay roughly $21,500 each year to the school fund.
The partners also applied to the DDA for a Building Reuse Grant. The board, however, has a policy that only gives an abatement and a reuse grant to residential projects.
“We believe that the tax abatement is of better benefit to the property,” said Fowler.
The most First Ward One would have received from the reuse grant was $50,000, while the abatement will save the firm more than $120,000 in taxes over those dozen years.
City commissioners need to approve the abatement request.
The public hearing has been held and the matter should be before commissioners soon. If they ratify it, then the request goes to Lansing for state approval.
“All that is in process and we’ve had no stumbling blocks along the way,” said Colovos.
Colovos said First Ward One has also filed for a brownfield designation with the state and for historic tax credits with the state and federal government.
“Our intention is to stay in this market,” said Colovos. “We love this city.”